Occam Nabs FairPoint Business
The upgrade will take place in former Verizon Communications Inc. (NYSE: VZ) territories in New England that FairPoint is acquiring through a deal announced early last year. (See FairPoint Takes Verizon Ops.)
Following the close of the deal, FairPoint has pledged to upgrade the former Verizon network in a multi-phase process. The network in question includes about 1.6 million access lines throughout Maine, Vermont, and New Hampshire.
The upgrade will include the deployment of Occam's BLC 6450 to create redundant 10-Gigabit Ethernet rings servicing more than 200 central offices in the region. Occam's BLC 6214 will also be used to add more than 50,000 new DSL lines in rural areas. (See FairPoint Plans Upgrade.)
Russ Sharer, Occam's vice president of marketing and sales, says the equipment's performance, ability to scale, and common management platform were key in winning the contract.
In a research note issued this morning, Jefferies & Company Inc. analyst George Notter writes that the total value of the deal is difficult to estimate. However, he expects Fairpoint to invest "a meaningful amount" to upgrade the network over the next few years.
"Through negotiations with regulatory agencies, the carrier has already committed to $57 million of capital spending over five years in Maine and at least $40 million each year for the next three years in Vermont. Only a fraction of the spending will be on access infrastructure, but we imagine the deal will be large enough to be interesting for Occam investors," Notter writes.
Although FairPoint received approval from the Federal Communications Commission (FCC) last week, the company still needs regulatory approval from various state agencies before the deal can be closed. (See FairPoint Approved.)
FairPoint has already gotten an OK for the transaction from Maine regulators, and it has reached a tentative agreement with the Vermont Public Service Board, according to Notter. But the company still needs approvals from New Hampshire regulators and the Vermont State Utilities board.
FairPoint is a long-time customer of Occam's, but in terms of access lines, this is the largest individual contract win for the equipment vendor. Sharer says this shows the continued momentum for his company as it serves ever-larger service provider customers. (See Occam Wins FairPoint.)
"This is a huge endorsement of everything we've been working on for the last five years," Sharer says. "This is the first time we'll be deployed at a phone company with 1 million-plus subscribers. It shows our products are growing into larger and larger networks."
— Ryan Lawler, Reporter, Light Reading